Motorists line up to buy petrol at a petrol station in Dongguan, south China's Guangdong province, August 17, 2005. China's southern manufacturing heartland of Guangdong is plagued by closed service stations, fuel rationing and hours-long gas queues. [newsphoto]

Cars line up to buy petrol at a petrol station in Dongguan, south China's Guangdong province, August 17, 2005. China's southern manufacturing heartland of Guangdong is plagued by closed service stations, fuel rationing and hours-long gas queues. [newsphoto]


Officials scrambled Tuesday to resolve severe gasoline and diesel shortages in China's south and east amid complaints that government price controls are worsening supply problems, the Associated Press reported.

Drivers in the southern province of Guangdong were waiting for hours for gas in lines up to a half-mile long, sometimes leaving with empty tanks when supplies ran out.

Motorcyclists wait to add fuel at a gas station in Guangzhou in this photo taken on August 12, 2005. [newsphoto]

In the southern city of Shenzhen, which borders Hong Kong, more than half of all gas stations closed Monday as shortages worsened, the Hong Kong-based newspaper South China Morning Post reported Tuesday.

Although disruptions to tanker traffic due to recent typhoons were one factor, the crisis is mainly blamed on government price controls that prevent local refineries from passing on higher costs due to surging crude oil prices, AP said.

Meanwhile, the price authorities in Guangdong Province has launched a crackdown on gas stations that drove up fuel prices, the Xinmin Evening Post reported Wednesday.

A gas station found pushing up prices is subjuct to a fine of up to 200,000 yuan, according to the Shanghai-based newspaper.

Signs of supply shortages began surfacing earlier this month, with reports that Guangdong filling stations were limiting vehicles to 50 yuan, or $6, worth of fuel - or about 11 liters, or nearly three gallons, of gas.

At the pump in Guangdong, gasoline currently retails for 4.28 yuan a liter, or $2.01 a gallon.

An official in the Shenzhen government's information office confirmed that the city was struggling to resolve the problem, saying it would take some time. In the meantime, the official, who refused to give his name, provided a list of 56 stations - out of more than 200 in the city - that he said still had fuel to sell.

The daily supply of gasoline to the city was about 10,500 gallons, while demand is well over 18,500 gallons, the Post reported.

"Generally speaking, the petrol supply in Guangdong is tight," said a publicity department official in the Guangdong branch of China Petroleum and Chemicals Corp., also known as Sinopec.

The outlook for just about every fuel category was "not optimistic," said the official, who gave only her surname, Huang.

Reports said the shortages had spread to Shanghai and eastern China's Zhejiang province. Shanghai's city government and filling station employees denied the city was facing shortages.

The government has appealed to major fuel suppliers Sinopec and China National Petroleum Corp. to boost shipments into Guangdong.

"Sinopec is trying to transport oil from other parts of China to fulfill Guangdong's needs," said Huang. But she added, "It does not totally depend on us."

In another development, Sinopec is expected hold an emergency meeting in Guangzhou to discuss measures to adress the shortages, the Xinmin Evening Post said.

Sources from Sinopec attributed the shortages in Guangdong to traffic disruptions caused by Typhoon Matsa and heavy rainfalls in Northeast China, according to the report. The oil storage in Northeast China is sufficient to resolve the shortages in Guangdong and once the railway and road traffic resumed, the shortages in the Pear River delta will be greatly eased, the sources said.

The shortages have prompted calls for changes in controls that fix gas and diesel prices at levels lagging well behind changes in international crude oil prices.

Pump prices in China rose an average of 20 percent year-on-year in the first five months of the year, while international crude oil prices surged 30 percent during the same time. Crude oil prices were hovering above $66 a barrel Tuesday, about 46 percent above the level a year ago.

With those higher costs eating into profits, domestic refiners reported net losses totalling 4.19 billion yuan ($517 million) in the first six months of this year, down from a net profit of 16.4 billion yuan ($2 billion) a year earlier.

Instead of meeting rising demand at home, refineries have instead boosted exports to markets overseas, where they can charge higher prices.

Editor: Yan